Feb
16
2012
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ICYMI: Venezuela’s homeless call racetrack home

Despite housing pledges from Chavez, Venezuela’s homeless call racetrack home
The Washington Post
February 16, 2012
By Juan Forero

CARACAS, Venezuela – The chestnut-colored 3-year-olds still take the turns hard and fast on the dirt track at La Rinconada, the once-elegant racing park inaugurated in 1959 as Venezuela began its oil-fueled heyday.

But these days, dozens of homeless families live under the vast concrete grandstands, moved by President Hugo Chavez’s government into cramped cubicles to alleviate a critical housing shortage. Water service is spotty, foul-smelling bathrooms overflow with sewage and gangs of young thieves steal what little residents have.

“God takes care of us,” explained Maria Valera, 61, saying the weekend races she sees for free are the saving grace of living at the track.

For those trying to survive here – indeed, for thousands more in similar conditions across Venezuela’s capital – it is just another symbol of this city’s long slide into squalor, decay and fear. And that is a serious problem for a leftist populist government that is frantically trying to build housing ahead of an October presidential election in which Chavez will be challenged by a young, energetic opposition candidate, Henrique Capriles.

Even among the masses of destitute in this country – for 13 years the backbone for Chavez’s so-called people’s revolution – there is a tinge of despair that El Comandante has been unable to deliver on a long-held promise: housing.

Just 200 yards from where thoroughbreds rumble, Valera said she is opting to wait for Chavez to provide a new home. But she and her family – she says there are about 50 of them here counting extended relatives – have been waiting for more than 14 months, leaving some in despair.

“We are waiting for him to resolve things because we know he will give to us,” Valera said, as her grandchildren squealed and ran along darkened corridors. “He said that all of us who are here would go to our own apartment.”

It is an often-heard refrain across Caracas, a city of about 5 million. Tens of thousands of people such as Valera were made homeless by torrential rains in 2010 that flooded over the slap-dash neighborhoods where they lived. Those homeless families left harried government officials with little alternative than to move them into shelters, abandoned buildings, love motels and even tents near the presidential palace.

Shortage of materials

Venezuela already faced a housing shortage of 2 million units, the government’s own statistics show, the state only managing to build a third of the 100,000 new units needed each year.

Julio Borges, an opposition deputy in the National Assembly who frequently clashes with Chavez on housing issues, said governments that preceded Chavez’s built more housing. “And we think it is the government’s own policies that are contributing to this problem.”

Indeed, Chavez’s government has nationalized the country’s steel and cement industries, leading to shortages in building materials, while seeking construction know-how from allies such as Cuba that have a spotty record in alleviating housing shortages. The president’s frustration was plainly evident as he spoke on national television last week after a group of homeless families took to the streets to demand government action.

“Does one pull homes out of one’s sleeve?” Chavez said.

“These are counter-revolutionary actions,” he added, referring to the demonstrators. “They act like enemies of the government.”

In more guarded moments, though, the government and its maximum leader offer rosy forecasts and issue impressive statistics. There are programs such as the “Grand Housing Mission,” designed to build tens of thousands of new units, and “My Well-Equipped Home,” in which the government provides free or low-priced Chinese furnishings being imported at a cost of $1 billion.

In all, some 200,000 homes will be completed this year, Chavez claimed. Looking ahead to his own reelection to another six-year term, he predicted the end of the housing crisis by 2019. “There should not be one Venezuelan family that does not have a dignified, good and pretty home,” Chavez said.

To be sure, with the government’s oil-funded money machine in high gear, construction is taking place. One collection of new apartment blocks is going up on a hillside overlooking La Rinconada, winning several hundred supporters ahead of the October election.

“The one I am going to thank is the president of the republic,” said Hilda Rivero, 62, who lives in a new government apartment, having been moved from slum housing, known here as ranchos. “I had a rancho and my president took me out of there and gave me a dignified home.”

‘No one responds to us’

It is hard, though, to ignore the grim realities of a city that in the 1970s was the continent’s most modern but has since become its most violent and, in some ways, anarchic.

Vast slums cover hillsides while towering housing projects have the feel of some tropical version of the brutal futuristic city in “Blade Runner.”

Hundreds of families have for years occupied one uncompleted 45-story tower, even though many of the floors lack elevator service, running water or even walls and windows to protect children from tumbling to the streets below. A block away is a vast half-built shopping mall, the expropriation of which Chavez announced in a national address and which now houses hundreds of other families.

The hallways of the tower are dark and forbidding, but “you get used to it,” said Franci Coronado, 19, her two small children wriggling playfully at her side.

Across town at the horse racing track, several residents reeled off the downside of life there: the killing of a young man thrown from a grandstand, the harrowing birth of a baby in a cubicle separated by dry wall from other living spaces, old shower stalls covered in feces.

Residents said they are on government waiting lists for housing, and asked that their full names not be used for fear that they would be punished for talking to a reporter.

“It is terrible,” said one 30-something man named Pedro, who is raising a family here. “There is no safety, the food is sometimes terrible, and no one responds to us.”

Some like Maria Valera, though, went out of their way to avoid criticizing the president, saying she believed other officials were to blame.

“There has been no president like this president,” she said. “This one has helped poor people a lot, the people who do not have the way of getting a home, who have no way to buy an apartment.”

To read the full article on the Washington Post please click here.

 
Dec
16
2011
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ICYMI: Chavez Rolls Back Seizures as Shortages Hurt Re-Election Bid

Chavez Rolls Back Seizures as Shortages Hurt Re-Election Bid
Businessweek
December 16, 2011
By Charlie Devereux

Venezuela’s President Hugo Chavez is enlisting Mexico’s Gruma SAB, French retailer Casino and other international companies to boost supplies of milk, corn flour and cement as shortages threaten to dent his bid for re-election in 2012.

Chavez, a self-declared Marxist, is rolling back policies that have allowed him to expand control over the economy. He is forging alliances with corporations he previously accused of price-gouging, such as Casino Guichard Perrachon SA, based in Saint-Etienne, and Gruma, Mexico’s largest corn flour maker.

“The government has realized that 100 percent expropriations don’t work and that’s why they’re looking to work with the private sector,” said Luis Vicente Leon, president of Caracas-based pollster Datanalisis, in a phone interview. “For the government, it’s the best of both worlds.”

Since taking office in 1999, Chavez has seized assets of 1,045 companies, according to Venezuelan manufacturing association Conindustria. The nationalizations have cost the government at least $9.9 billion in compensation paid to companies, while claims for another $20 billion are under dispute at international courts, said Jose Luis Saboin, an economist at Caracas-based research company Ecoanalitica.

Earlier this month, Chavez and Gruma agreed to form joint ventures to produce corn flour, rice, pasta and oatmeal. Last year, Chavez seized one of the Monterrey-based company’s local units.

‘Flexible Model’

“In the past, socialist models that nationalized everything were forced to later ease their policies,” the 57- year-old Chavez said Aug. 1 on state television. “We’re moving towards a flexible model, our historic creation.”

Calls to Gruma’s press department by Bloomberg News weren’t returned.

Cali, Colombia-based Forsa SA, which produces aluminum molding for construction, last month agreed to form a joint venture with Chavez to produce materials for his housing projects.

Chavez also invited Cemex SAB, the largest cement maker in the Americas, to re-invest in the country after paying the Monterrey-based company $600 million this month to resolve a three-year dispute over compensation for assets he had seized in 2008.

Shortages are being aggravated by 27 percent inflation that’s the highest of 78 economies tracked by Bloomberg, and a slow recovery from a year-and-a-half recession. Foreign direct investment has plunged 75 percent to $1.2 billion in 2010 from $5 billion in 1998, according to the central bank.

In the first nine months of this year, gross domestic product grew 3.8 percent, according to the government.

Borrowing Costs

Venezuela has the highest borrowing costs of major emerging-market countries. Investors demand a yield of 1,276 basis points, or 12.76 percentage points, more than U.S. Treasury bills to hold the government’s debt, according to JPMorgan Chase & Co.’s EMBI Global index.

Steel and cement producers are among the companies that have pared output this year, delaying Chavez’s hallmark program to build homes for the poor, while supermarket shelves are missing staple foods at a time when the former tank commander is canvassing for votes.

Milk is one item difficult to obtain. Angela Mera, a 51- year-old house cleaner, said she hasn’t found powdered milk for two months in the three supermarkets near her home in the Caracas working-class neighborhood of El Valle. Cooking oil is also in short supply, while the only coffee she has was brought by a friend from Colombia, she said in a Dec. 15 interview.

“Even my friends who work at supermarkets sometimes can’t get hold of products,” she said.

Past Hostility

The recent accords with private business show Chavez has become aware of the failings of many state enterprises, Leon said. They also mark an end to past hostility to foreign companies.

In January 2010, Chavez seized a chain of 41 stores partly owned by Casino on accusations of price gouging following a 50 percent devaluation of the bolivar. “You must respect our house,” he said at the time. Ten months later he agreed to pay Casino $690 million for an 80 percent stake in the company’s local supermarkets.

Casino retained the other 20 percent and is “providing operational support to and developing co-operation with the new state-controlled entity,” Casino spokesman Frederic Croccel said in an e-mailed response to questions. He declined to comment on how the relationship with the Venezuelan government works.

Some Protection

For foreign companies, partnering with Chavez provides some protection from further meddling, Leon said. It also allows them to retain a “foot in the door” in the anticipation of an improvement in the investment climate if the opposition holds onto a lead in polls and unseats Chavez in next year’s presidential election, he said.

“It’s a commercial operation without the risk of being the sole owner in a country where the state can do what it likes,” Leon said.

Venezuela’s Information Ministry didn’t immediately return an e-mail seeking comment on Chavez’s nationalization policy.

Chavez’s last nationalization of a publicly traded U.S. company was in October 2010 when he seized a unit of glass container manufacturer Owens-Illinois Inc. The Perrysburg, Ohio- based company filed for arbitration in September after posting a $335 million charge from writing off the takeover.

Rusoro Mining Ltd., a Vancouver-based miner that operated two prospects in Venezuela, is currently in talks to form a joint venture with the state after Chavez nationalized the gold industry in August.

Production Plunging

The policy shift comes as nationalized companies flounder under inexperienced management and fail to attain production targets, said Richard Obuchi, a professor in public policy at the Institute of Superior Administrative Studies business school in Caracas.

Output at Siderurgica del Orinoco has dropped 35 percent since 2009, when Chavez acquired Venezuela’s biggest steelmaker from Luxembourg-based Ternium SA for $1.97 billion, union leader Jose Jimenez said Sept. 23.

Steel rods are key to Chavez’s plan to eradicate a housing deficit. Chavez on Dec. 11 said the project would build 50,000 fewer homes next year than the initial goal of 200,000.

Henrique Capriles Radonski, a front runner to win an opposition presidential primary scheduled for February, said nationalizations have sapped productive industries.

“There’s an excess of government intervention in everything,” Capriles, Governor of Miranda state, said Dec. 12.

Agricultural Output

Boosting agricultural production to slow inflation and replenish food stocks is another part of Chavez’s electoral strategy. Food processors, stores and more than 2.5 million hectares (6 million acres) of farm land and ranches have been seized during his administration.

While forming partnerships with the private sector may cut the financial burden for the government, Chavez is unlikely to drift far from his radical course, Saboin said.

“While Chavez may adapt the format for nationalizations, if he wins another term he will continue to increase his hold over the economy and won’t cut back on nationalizations any more than he needs to,” Saboin said. “Pragmatism is the order of the day, but only in the areas where it’s required.”

 
Dec
16
2011
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In Case You Missed It… Articles Roundup Week of 12/16/11

In this week’s roundup…President Hugo Chávez’s repatriation of Venezuela’s gold continues apace; Venezuelan judge sentences an anti-Chávez colleague to two more years of house arrest; a prominent economic expert says that Chávez’s policies have hurt the Venezuelan economy; and the new regional body led by Chávez gets off to an underwhelming start.

Chavez flies Venezuela gold home to avoid EU turmoil, The Telegraph

Billions of dollars worth of gold is being flown around the globe in a massive drive to bring home Venezuela’s riches from the West. Officials are under orders from Hugo Chavez, the country’s socialist president, to repatriate the nation’s gold reserves against the backdrop of a wider effort to nationalise its gold sector. Last week Venezuela said it had safely received its second load of gold from overseas. It would not give much detail, but the first cargo welcomed by flag-waving crowds last month was said to be18 tonnes worth some $300m (£192m).

Venezuela authorities rule anti-Chavez judge to spend 2 more years under house arrest, The Washington Post

Venezuelan authorities on Tuesday extended house arrest for a judge whose case has been strongly criticized by human rights groups. Judge Ali Fabricio Paredes ruled that his colleague, Maria Lourdes Afiuni, must remain under house arrest for two more years, saying she has intentionally delayed her own trial by repeatedly refusing to enter a courtroom.

Expert: Venezuela’s economic model leads to weak economic growth, El Universal

Venezuelans’ quality of life has been affected by the economic policies implemented by Hugo Chávez’s Administration. Changes to the institutional structure are creating uncertainty and are affecting the possibilities for development, according to Efraín Velásquez, the President of Venezuela’s National Economic Council. Velásquez warned against high inflation and said that while Venezuela’s economic activity began to show an upward trend this year, these results have a limited effect. “In principle, the level attained in the third quarter of 2011 (3.5%) has the same size as in 2009,” he said.

Zakaria: The Hugo Chavez show, CNN

Last week saw the debut of a big new regional alliance. Thirty three countries came together to promote relations in the Americas. But, guess what – America itself (that is, the United States of America) was missing. And that was the point. What in the World is going on? To explain, let me tell you a bit more about the summit. It’s called “CELAC” – a Spanish acronym for “the Community of Latin American and Caribbean States.” It was held in Caracas, Venezuela, and the organizer was none other than that perennial America basher – President Hugo Chavez.

New CELAC organization faces detractors, funding issues, The Washington Times

A new organization meant to unite 33 nations in the Americas against the United States just adds to the region’s crowded field of largely meaningless multilateral entities, observers say. The Community of Latin American and Caribbean States, made up of all of the hemisphere’s sovereign nations except the United States and Canada, last week held its inaugural summit, hosted amid great fanfare by Venezuelan President Hugo Chavez. But, the bloc, known by its Spanish initials CELAC, lacks brick-and-mortar structures as much as common interests among its members, ranging from U.S. allies such as Mexico and Colombia to foes including Mr. Chavez, experts at Washington-based think tanks say.